Aug 03, 2005—A software startup based in Los Gatos, Calif., is developing what it calls predictive applications. These applications will use RFID and other data to help companies already tagging goods in the supply chain to avoid lost sales by ensuring the right amount of products are on store shelves at the right time. The company, TrueDemand, promises to help manufacturers and retailers reduce out-of-stocks and get more value from special offers and promotions. TrueDemand says its suite of products, unnamed at this time, should reach the market by the end of the year.

"We're trying to make the first applications to really take advantage of RFID data in a supply chain application environment," says TrueDemand’s CEO and co-founder, Eric Peters, formerly of supply chain software developer Manhattan Associates and consulting firm Accenture. "We'll use data from RFID and help companies solve problems, such as out-of-stocks, before they happen."

TrueDemand’s Eric Peters

TrueDemand is backed by $6 million in funding from venture capital firms Mayfield, based in Menlo Park, Calif., and Bay Partners, located in Cupertino, Calif.

TrueDemand’s applications are based on algorithms that combine Electronic Product Code data from RFID tags, collected by manufacturers and retailers as tagged goods move from distribution centers through retail stores, with other data such as sell-through information from point-of-sale systems and logistics information on where goods are in the supply chain. The software is designed to alert manufacturers and retailers when particular items are likely to sell out; its forecasts can also be used to help companies reduce inventory levels while still maintaining enough stock to meet demand. Peters says these forecasts will be short-term and updated continually as more data is gathered, so that users will receive the most accurate data possible.

The TrueDemand products are being built in IBM's WebSphere application development platform, allowing companies to integrate them with enterprise resource planning (ERP) software from SAP, Oracle and other ERP vendors. "We're developing these tools not to replace the forecasting systems in ERPs, but to augment them in order to provide users of RFID with valuable information," says Peters. The applications will be targeted toward RFID users in three main industries: consumer packaged goods, pharmaceuticals and consumer electronics.

Beta versions of the company’s first applications are currently being tested with early customers and partners of the company. According to TrueDemand’s Web site, its technology partners include RFID hardware maker Alien Technology, software giant IBM, RFID middleware provider OATSystems and systems integrator Xterprise.

In addition to Peters, TrueDemand—which officially launched last week—was co-founded by Raymond Blanchard and Hau Lee. Blanchard, former auto-ID business development director for SAP's Manufacturing Business Solutions Group, is TrueDemand's vice president of business development. Hau Lee, a professor of management science and engineering at Stanford University's Graduate School of Business, is the chief supply chain strategist and chair of the science team. Steve David, retired chief information business-to-business officer of Procter & Gamble, and Ray Hagedorn, retired CIO and vice president of IT business relations and strategy at Sara Lee Corporation, are on the company's advisory board.

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